close
Breaking news

A new line of argument has already come to dominate the public sphere: it’...read more The government has gone one step further to detect community spread of the coro...read more The government has issued an order to abolish the six allowances, including the...read more Aarogya Setu application launched by NIC is aimed to track COVID-19 affected pe...read more SEOUL| South Korea’s unemployment rate was unchanged in April as the coronavi...read more Amid the outbreak of Corona pandemic in the country, Indian government has been...read more Prime Minister Narendra Modi in his address to the nation on Tuesday indicated ...read more Corona infection in the country is taking a macabre form. So far, more than 74 ...read more Congress General Secretary Priyanka Gandhi Vadra has written a letter to UP Chi...read more On Tuesday, Prime Minister Narendra Modi announced a package of Rs 20 lakh cror...read more

After Reliance Jio ends free voice call ,Bharti Airtel, Vodafone Idea gain

Shares of Bharti Airtel Ltd and Vodafone Idea Ltd surged on Thursday after most profitable telecom operator Reliance Jio said it will end free voice calls on its network.

Bharti Airtel Ltd soared 4%, while Vodafone Idea gained 18%. Reliance Industries Ltd rose 2.5%. In last three sessions, Bharti Airtel gained 10% while Vodafone Idea advanced 30%.

Reliance Jio said late Wednesday it will start charging for calls made to rival networks at 6 paise a minute. This comes as a major relief for rivals Bharti Airtel and Vodafone Idea which have been left bleeding financially as a result of the rock-bottom tariffs offered by the Mukesh Ambani-controlled company.

Analysts believe Jio’s tariff hike is prima facie positive for the industry as it enables other operators to raise tariffs too. Other operators may not take the price hike in the same form though considering its potential negative effect on user experience. Other operators may see a drop in calls terminating on their networks, but the tariff hike should be able to compensate for it well.

The move came after Telecom Regulatory Authority of India (Trai) on 18 September floated a fresh consultation paper to see if there is a need to revise the applicable date for scrapping interconnect usage charge (IUC), given the continuing imbalance in inter-operator traffic.

“This works out to a price hike of about 14%. However, we believe that additional charges for off-net calls would disincentivise users to call other operators, which would reduce off-net call volumes for RJIO. We expect additional charges to drive up revenue ~5%, which would translate into ~10% increase in EBITDA,” said Edelweiss Finance in a note to its investors.

“We believe the tariff hike from the price-setter is positive for the telecom industry and will provide other operators leeway to hike prices proportionately. We anticipated a price hike by RJIO in H2FY20. But the way the price hike has been taken is perplexing considering it may cause inconvenience and anxiety to subscribers. Other operators may follow suit, but by simply raising the tariff,” the report added.

Tags: , , , ,

Story Page

Download Our Mobile App